While Strongly Valuing College, Families Continue to Cut Costs, Says National Study by Sallie Mae and Ipsos08:44 EDT Monday, July 16, 2012
NEWARK, Del. (Business Wire) -- Eighty-three percent of college students and parents strongly agreed
that higher education is an investment in the future, and the majority
found multiple ways to cut college costs, according to a new
national study from Sallie Mae and Ipsos Public Affairs.
Students now foot an expanding share of the college tuition bill, while
parents scale back compared to four years ago. Drawing from savings,
income, and loans, students paid 30 percent of the total cost of
attendance last academic year, up from 24 percent four years earlier,
while parents covered 37 percent, down from 45 percent in the same time
period.
“Once again, we see that families recognize the value of a college
education and that they are taking steps to keep college costs in line
with their financial resources,” said Albert L. Lord, vice chairman and
CEO, Sallie Mae, the nation's No. 1 financial services company
specializing in education. “Data confirms again and again that the
investment carefully made significantly enhances the lives and
livelihoods of those who complete their education.”
The percentage of families who eliminated college choices because of
cost rose to the highest level (69%) in the five years since the study
began and virtually all families exercised cost-savings measures. The
most common cost-savings strategies included living at home (51%),
adding a roommate (55%), and reducing spending by parents (50%) and
students (66%). In 2012, families continued the shift toward lower cost
community college, with 29 percent enrolled, compared to 23 percent two
years ago. In fact, overall, families paid 5 percent less for college
compared to one year ago.
“This is really a tale of the resilient American family who still see
the extreme value of a college education and are finding new and
creative ways to pay for it,” said Clifford Young, managing director,
Ipsos Public Affairs and a principal author of the report.
In response to new survey questions, American families reported that
students make college selections largely on their own while parents
played a much greater role in deciding how to pay for it. For the first
time this year, the study examined student loan borrowing by student
course of study. The field with the highest percentage of borrowers was
visual and performing arts (53%), followed by liberal arts (42%).
More than two-thirds of students and parents strongly agreed that
college is needed now more than ever (70%) and the path to earning more
money (69%). The number of students willing to stretch themselves
financially to pay for college (61%) is higher than each of the previous
five years of the survey, while parents' willingness held steady from
last year (53%). Less than half of parents strongly agreed that they
would rather borrow than not send their child to college (47% vs. 51% in
2011), whereas the percentage of students who preferred to borrow rather
than not attend remained unchanged (62%).
Grants and scholarships declined from last year's peak, but were still
higher than previous years, financing the largest portion of college
bills (29%). Student borrowing funded a larger percentage of costs (18%
vs. 15% in 2010), with federal student loans accounting for 13 percent,
private student loans 4 percent and other types of borrowing 1 percent.
Thirty-five percent of students borrowed education loans to pay for
college: 25 percent borrowing federal loans only, 9 percent using a mix
of federal and private loans, and 1 percent tapping private loans only.
The high usage of federal loans among students with private education
loans reflects their nearly universal use of the FAFSA (98% compared to
81% overall).
Credit card ownership by college students has dropped two years in a
row. Overall, 35 percent of undergrads carried a credit card, down from
42 percent in 2010, with the sharpest drops among sophomores and
juniors. Of those with a card, the average balance was $755.
Thirty-three percent reported carrying no balance on their credit card.
The 2012 nationally representative study, “How America Pays for
College,” is the fifth in the series. Interviews with 801 undergraduate
college students, ages 18 to 24, and 800 parents of undergraduates were
conducted by telephone spring 2012. The margin of error on percentages
from this survey using the whole sample is +/-2.5 percentage points with
a confidence level of 95 percent. The full study and a related
infographic are available at www.SallieMae.com/HowAmericaPays.
Sallie Mae (NASDAQ: SLM) is the nation's No. 1 financial services
company specializing in education. Whether college is a long way off or
just around the corner, Sallie Mae turns education dreams into reality
for its 25 million customers. With products and services that include
college savings programs, scholarship search tools, education loans,
insurance, and online banking, Sallie Mae offers solutions that help
families save, plan, and pay for college. Sallie Mae also provides
financial services to hundreds of college campuses as well as to federal
and state governments. Learn more at SallieMae.com. Commonly known as
Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or
agencies of the United States of America.
Ipsos is an independent market research company controlled and
managed by research professionals. Founded in France in 1975, Ipsos has
grown into a worldwide research group with a strong presence in all key
markets. In October 2011, Ipsos completed the acquisition of Synovate.
The combination forms the world's third largest market research company.
With offices in 84 countries, Ipsos delivers insightful expertise across
six research specializations: advertising, customer loyalty, marketing,
media, public affairs research, and survey management. Ipsos researchers
assess market potential and interpret market trends. Ipsos has been
listed on the Paris Stock Exchange since 1999 and generated global
revenues of €1,363 billion (1.897 billion USD) in 2011.
Sallie MaePatricia Nash Christel, 302-283-4076patricia.christel@salliemae.comorDebby
Hohler, 617-454-6741dhohler@upromise.com

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